2012: The challenges ahead

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Following a tough and tumultuous 2011, Exhibition News sat down with representatives from the venue, organiser and supplier sectors to find out just what’s on the cards for 2012. There’s no doubt the UK’s events sector will be in the spotlight this year as a series of significant world-class events take over the capital and country. The festivities kick off with the Queen’s Diamond Jubilee and are swiftly followed by the biggest one of them all, the Olympic Games. But just what implications does this have for the exhibition industry? We also asked organisers, venues and suppliers to share the lessons they learnt during 2011 and how these are shaping the opportunities and challenges of the New Year. Organisers Organisers are tightening their belts until mid-2012 at which point they anticipate a return to profitable business. Several warn of a squeeze on retail shows and express fears over the impact of the possible closure of Earls Court. But face-to-face marketing and public sector shows have been tipped as resilient means to help business into the new year. For MD of Pioneer Shows Nick Orton, 2011 will be remembered as a year when the strong survived and the weak died off. “With the doom and gloom about the economy, 2011 was about digging deep and working hard,” he said. “For Pioneer it was a great year growing our consumer shows so my overall impression was that 2011 was good for exhibition business.” Orton urged the exhibition industry to shed some of its old-fashioned practices as it enters the New Year. “Things are going to be more difficult this year and beyond,” he continued. “I see the industry as being in the middle of a long transition period where there are still outdated, old-fashioned shows around, which put exhibitors and sponsors off exhibiting. “As more modern, content-rich and exciting shows come through and develop, exhibitor attitudes will change. In the meantime, hard work and perseverance will pay off.” For Association of Exhibition Organisers (AEO) chairman Stephen Brooks, 2012 will be more difficult for exhibitors faced with further cost-cutting as the country prepares for another economic downturn. Faversham House chief executive Amanda Barnes agreed. “We are certainly not out of the woods yet,” she said. “2012 will be a tough year.” VOS Media MD Damian Norman recommended a pragmatic approach to budgeting in 2012.“Write your business plan and then reduce your expectation by 10 per cent and you will be about right,” he recommended. “If you’re over, then bank that and move on to the next one.” The biggest challenge will be declining attendances, reduced marketing budgets and diminished return on marketing spend, Norman continued. “The events industry will be fine but we cannot kid ourselves in thinking that we are immune to the knock-on effect of global financial uncertainty,” he said. Brintex MD Malcolm Taylor gave 2011 a mixed review but expected certain shows to prosper in 2012. The trade show organiser presented 13 exhibitions in 2011, higher than average as a result of the biennial cycle of several events. “Stand sales declined on virtually all our UK shows, which we largely expected as more than half our calendar serves the public sector,” Taylor said. “The good news is visitor attendances held up really well.” Early signs suggest the public sector could stabilise in 2012, Taylor said. “Much seems to depend on the market sectors and personally I fear the next six months will be equally as hard,” he said. “So far it’s proving harder to attract exhibitors for our shows serving the retail sector, but easier for shows offering new technologies. Public sector shows are expected to be about the same as 2011.” For the AEO, the benefits of face-to-face marketing will become increasingly apparent in 2012 and the association will focus heavily on its FaceTime promotional initiatives. Brooks said a key aim is to “engage members as fully as possible in all live issues”. For Taylor, face-to-face marketing continues to gain recognition for its effectiveness and measurability. “Backed by the AEO’s FaceTime campaign, 2012 can be the year to really gain massive awareness of the value of exhibitions in the marketing mix,” he said.However the anticipated loss of Earls Court looms large for organisers, with a decision on its future anticipated later this year. “If the closure of Earls Court is given the go-ahead it will be negative for everyone that works in events in the UK,” said Brooks. Taylor also warned about the lack of hall capacity.“With the likely loss of Earls Court in the next couple of years our industry will certainly be short of space for medium-sized shows in central London,” he said. But despite some of the gloomier prognoses, organisers are still looking forward to next year. Interestingly, Orton didn’t anticipate more consolidation and said launches will be the top of many organisers’ agendas including Pioneer’s. “I can’t wait for mid-2012 when I can get back into the trade show market,” he added.Norman said the opportunities for VOS will be to exploit the link-ups between digital and live events. “The print industry is in decline with circulations falling resulting in diminished ROI,” he said. “Does this help events? Potentially. Will the bigger winner be digital? Quite possibly. That said, digital and live events are good bedfellows and the growth of the former may stimulate the latter.”Venues UK venues are looking to reap the knock-on benefits of the Olympic Games as they look ahead to 2012. Excel London has already received acclaim from the London Organising Committee (LOCOG) for staging seven test events: Table tennis, weightlifting, boxing, wrestling, judo, fencing and taekwondo. But despite uncertain economic times requiring short-term budget cuts, exhibition venues told EN they are confidently predicting a bumper second half of the year. “The first half of next year will be testing, with short-term budget decisions likely to affect shows in the early part of the year and visitor numbers remaining under pressure,” said The NEC’s venue sales director Stephen Richards. “That said, I would expect to see the second half of the year, with the Olympics and associated events, produce a mood swing towards the positive.” Earls Court and Olympia (EC&O) commercial director Anna Golden agreed the exhibition industry is coming out of tough times, albeit slowly. “2011 was undoubtedly a tough year. Despite this we saw sales growth for the first time since 2008 and welcomed a record-breaking 36 new shows to our venues,” she said. “2012 will undoubtedly be a tough year. We reflect the markets we serve and traditionally venues lag into and out of a recession.” Excel London MD David Pegler claimed the venue has had its best ever year boosted by its pre-Olympic recognition. “We have experienced considerable growth in both the number and quality of the 270-plus events we have hosted,” he said. Looking ahead, venues suggested a range of measures to reap rewards for the exhibition industry.“We know exhibitions and live events create focused platforms and productive partners for digital sales and marketing campaigns. We have to continue to prove that,” said Richards. The NEC’s focus is on demonstrating its less well-known virtues to the broader events market and supporting exhibitors’ trade associations. “I think we’ll see more conference/exhibition hybrids, such as GAMEfest, where organisers can really capitalise on the economies of scale that type of event can offer,” he said. “We also have a number of quirky and niche consumer shows in various stages of discussion, as we see the appetite for event-based entertainment continuing to attract audience attention.” After the closure of Olympia’s District Line services in December 2011, the venue has had a taste of events out of its control impacting on its business. “Expect the unexpected,” warned Golden. “The changes to the Olympia tube line have provided their own challenges in 2011 but it’s important to see the positives in every situation and to build on them.” Golden anticipated Olympia’s new West Hall will spark business wins in 2012. “The greatest opportunity for 2012 will be the opening of the new West Hall at Olympia, which will provide us with more diverse, flexible space for organisers to use and an ideal venue for launch events,” she said. Pegler sees the ability to internationalise audiences at events as key to Excel’s success this year. “There is greater mobility in the marketplace and people are more prepared to travel to the right event,” he said. “This would offer more value for organisers, exhibitors and visitors. The UK exhibition industry has always been based on domestic shows with domestic audiences.” It may be seven months away but exhibition venues, some of which are hosting Olympic events, are already licking their lips at the world’s biggest sporting event coming to our shores. “The range and number of events being held at Excel means there will be a huge media spotlight on the venue where most of the world will be watching,” said Pegler. “We will be hosting seven Olympic and six Paralympic events, as well as training centres, a vehicle logistics centre and uniform store.” Earls Court will host the volleyball competition. “We’re delighted to have been selected to host an Olympic event and look forward to hosting up to 15,000 enthusiastic spectators per session,” said Golden. Clearly the exposure London will receive over those six weeks in the summer will be the biggest shot in the arm for the exhibition industry all year. “The showcase of London during this period will enhance market interest and create even more positive images of why the capital is such an attractive destination for organisers to host their events,” Pegler added.Suppliers Like their organiser and venue counterparts, suppliers have had a mixed 2011. While there have been pockets of opportunity, sweeping industry consolidation, a squeeze on costs, later payment cycles, increased last-minute purchasing and reduced exhibitor spend make for a challenging business environment. Despite the downturn, exhibition contractor Sovereign experienced a good year in 2011 as its client base expanded, allowing it to work with new shows and venues. While reluctant to suggest we’re out of the woods, Sovereign sales director Andy Hickinbotham cited several potential projects for Q1 and Q2. “This forthcoming business illustrates some market sectors are looking well ahead into the year,” he claimed. “Some sectors are still spending good proportions of their marketing budgets on exhibitions and events. “We’ve certainly learnt the value of maintaining our mix of clients – especially the balance between client-direct projects and those where we’re working with or through a third party. “Maintaining growth in market sectors that are still buoyant and being alert to sectors that aren’t is key.” An ongoing industry challenge, potentially exacerbated by cost-conscious clients and cash-strapped businesses, is underlying issues between suppliers and organisers with regards to tenancy times, sit-service costs and health and safety management, Hickinbotham said. “I would say there are some bridges to be rebuilt.” The Olympics has certainly opened up new business avenues for suppliers, but aside from that, Hickinbotham spotted an opportunity in UK exhibitions attracting more exhibitors from key emerging markets such as India and China. “Truly international shows will be required to entice exhibitor and sponsor investment, as I think exports to those emerging markets are going to remain financially tricky in 2012,” he continued. For its part, Sovereign’s top priorities in 2012 will be on raising its company profile, conducting more comprehensive customer service reviews to ensure clients feel valued and secure their loyalty, and staying close to the market. Raising awareness of the diversity of its services is also on Index Group’s to-do list, director of its KR Exhibition Services division Keith Richards said. The contractor will exhibit at Confex for the first time in many years as part of an overall plan to improve its standing within the exhibition industry. Rapid consolidation across the supplier sector, illustrated by the merger of Stanco/Opex and Early Action Group in 2011, has given remaining full-service contractors a better chance to become an alternative choice for organisers, Richards claimed. To ensure its position as that third option, Index Group is putting significant focus on innovation and improving its services to deliver better value and something different to organisers and exhibitors. “From 2009 we’ve all felt the pain and 2011 has been no exception,” Richards continued. “I think everyone has realised now it’s going to be 2014 or later before we are clear of the downturn. “We have dealt with this by listening to organisers, finding out what ticks them off and taking a more entrepreneurial approach to doing business with them. As a result we are now attracting more of the entrepreneurial organisers looking for something they can differentiate themselves with.” For Event Services Supplier Association (ESSA) director Chris Skeith, spending will continue to be analysed in 2012 and it is imperative the exhibition industry continues to adapt to suit clients’ needs. “I am sure budgets will be heavily scrutinised in 2012 and by capitalising upon the operating efficiencies and core strengths identified within the industry, margins will be managed and we will remain a vital part of face-to-face marketing,” he said, adding the London 2012 Olympic Games present the greatest opportunity and challenge for the industry. “As an industry used to working quickly and to tight deadlines, we will see a large number of members being called in to assist as the games approach,” Skeith said. “Delivering our industry commitments in 2012 will be a challenge due to the increased pull of resources by the Olympics and we need to ensure that we maintain the high standards and service delivery for our existing clients.” ESSA has had a strong year, nearly reaching membership levels recorded before the recession, Skeith said. To help suppliers grow in 2012, ESSA’s key objectives for the New Year are to drive its ‘use an ESSA member’ marketing campaign, increase member benefits and ensure ESSA remains an active participant in discussions on the industry’s future. Despite the difficult climate, Richards was confident solid businesses that offered value for money and listened to customers will hold their own. “In 2012, if your offering is good enough, the quality is there and you are innovating, people will still buy from you and even pay a bit more if they see it as value for money,” he added. As Hickinbotham put it, success will come down to better communication. “We offer services other than design and build, but if they’re not identified, stereotypical assumptions will lead to missed opportunities,” he added. Any comments? Email exhibitionnews@mashmedia.net

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